IHC Takes Notice of FBR Officers Abusing Law For Tax Recovery From Distribution Companies

The Islamabad High Court (IHC) has taken serious notice of the persistent breach of its orders in the Pakistan LNG case and ordered to submit names of Large Taxpayer Officer (LTO) Islamabad officers who are involved in tax recovery moves through attachments of bank account of Power Distribution Companies (DISCOS).

Earlier IHC issued notices to high-ranking officials, including the chairman of the Federal Board of Revenue (FBR), the member operations-IR, and tax employees of the LTO including Chief CIR, Commissioner, and Deputy Commissioner Zone-II, Islamabad.

The petition has been fixed for 29 February 2024.

Reliable sources reveal that the Islamabad Electric Supply Company Limited (IESCO), after the prolonged silence from FBR/LTO Islamabad, took legal action through tax lawyer Waheed Shahzad Butt and preferred constitutional petition before IHC against forced tax recovery through the illegal attachment of bank accounts of the IESCO.

The petitioner IESCO raises concerns over the alleged tax robbery tactic, executed without proper legal procedure, and in direct violation of the IHC’s binding order in the Pakistan LNG case. The petition contends that the matter had not been clarified despite previous instructions from FBR regarding the necessity of obtaining prior approval from the FBR Member Operations-IR.

Waheed Shahzad Butt asserts that certain tax employees at the LTO are openly flouting FBR instructions regarding the attachment of bank accounts of DISCOS, National Transmission & Dispatch Company (NTDC), and Central Power Purchasing Agency (CPPA). The lawyer said that the instructions issued in C. No. 6 (21) S (IR-Operations)/ 2017/ 35481-R dated 20.03.2017 have been blatantly ignored and violated by LTOs without any apprehension of accountability, a claim reaffirmed by the parent agency (FBR) on November 27, 2023, by the office of Member Operations-IR.

IHC order states that the petitioner is aggrieved by recovery notices dated 22.02.2023 pursuant to which coercive recovery has been affected from the accounts of the petitioner. The learned counsel states that the assessment was pending adjudication before the CIR (Appeals), who by order dated 21.02.2023 had dismissed the petitioner’s appeal.

Such an order was communicated to the petitioner at 02:00 p.m. on 22.02.2023. However, without issuing any prior notice after the dismissal of the petitioner’s appeal or even the communication of the appeal order to the petitioner, coercive recovery was affected at 09:00 a.m. on 22.02.2023 in breach of law.

Coercive recovery is also in breach of the instructions issued by FBR in a letter dated 20.03.2017 directing the Commissioners that coercive recoveries are not to be affected against discourse without the prior approval of FBR. The court has set the next hearing for February 29, demanding reports and para-wise comments from the respondents’ FBR and LTO tax employees.

Get Alerts

Follow ProPakistani to get latest news and updates.

ProPakistani Community

Join the groups below to get latest news and updates.